COMMERCIAL GUARANTY
Borrower:ART'S-WAY MANUFACTURING CO.,INC. Lender:WEST DES MOINES STATE BANK
(TIN:00-0000000) MAIN BANK
XXX 0 XXXX, XX BOX 288 0000 00XX XXXXXX
XXXXXXXXX,XX 00000-0000 XXXX XXX XXXXXX, XX 00000
(000)000-0000
Guarantor: X XXXX XXXXXXXXX XX (SSN:###-##-####)
PO BOX 6246
KINSTON, NC 00000-0000
AMOUNT OF GUARANTY. This is a guaranty of payment of the Note, including
without limitation the principal Note amount of Two Million Five Hundred
Thousand & 00/100 Dollars ($2,500,000.00).
GUARANTY. For good and valuable consideration, X XXXX XXXXXXXXX XX
("Guarantor") absolutely and unconditionally guarantees and promises to
pay to WEST DES MOINES STATE BANK ("Lender") or its order, in legal tender
of the United States of America, the Indebtedness (as that term is defined
below) of ART'S-WAY MANUFACTURING CO., INC. ("Borrower") to Lender on the
terms and conditions set forth in this Guaranty.
MAXIMUM LIABILITY. The maximum liability of Guarantor under this Guaranty
shall not exceed at any one time the amount of the Indebtedness described
herein, plus all costs and expenses of (A) enforcement of this Guaranty
and (B) collection and sale of any collateral securing this Guaranty.
The above limitation on liability is not a restriction on the amount of
the Indebtedness of Borrower to Lender either in the aggregate or at any
one time. If Lender presently holds one or more guaranties, or hereafter
receives additional guaranties from Guarantor, Lender's rights under all
guaranties shall be cumulative. This Guaranty shall not (unless
specifically provided below to the contrary) affect or invalidate any
such other guaranties. Guarantor's liability will be Guarantor's aggregate
liability under the terms of this Guaranty and any such other unterminated
guaranties.
INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty
includes the Note, including (a) all principal, (b) all interest,
(c) all late charges, (d) all loan fees and loan charges, and
(e) all collection costs and expenses relating to the Note or to
any collateral for the Note. Collection costs and expenses include
without limitation all of Lender's attorneys' fees.
DURATION OF GUARANTY. This Guaranty will take effect when received
by Lender without the necessity of any acceptance by Lender, or any
notice to Guarantor or to Borrower, and will continue in full force
until all Indebtedness shall have been fully and finally paid and
satisfied and all of Guarantor's other obligations under this Guaranty
shall have been performed in full. Release of any other guarantor or
termination of any other guaranty of the Indebtedness shall not affect
the liability of Guarantor under this Guaranty. A revocation Lender
receives from any one or more Guarantors shall not affect the liability
of any remaining Guarantors under this Guaranty. This Guaranty covers
a revolving line of credit and it is specifically anticipated that
fluctuations will occur in the aggregate amount of Indebtedness owing
from Borrower to Lender. Guarantor specifically acknowledges and
agrees that fluctuations in the amount of Indebtedness, even to
zero dollars ($0.00), shall not constitute a termination of this
Guaranty. Guarantor's liability under this Guaranty shall terminate
only upon (A) termination in writing by Xxxxxxxx and Lender of the
line of credit, (B) payment of the Indebtedness in full in legal
tender, and (C) payment in full in legal tender of all of Guarantor's
other obligations under this Guaranty.
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender,
without notice or demand and without lessening Guarantor's liability
under this Guaranty, from time to time: (A) to make one or more
additional secured or unsecured loans to Borrower, to lease equipment
or other goods to Borrower, or otherwise to extend additional credit
to Borrower: (B) to alter, compromise, renew, extend, accelerate,
or otherwise change one or more times the time for payment or other
terms of the Indebtedness or any part of the Indebtedness, including
increases and decreases of the rate of interest on the Indebtedness;
extensions may be repeated and may be for longer than the original
loan term: (C) to take and hold security for the payment of this
Guaranty or the Indebtedness, and exchange, enforce, waive,
subordinate, fail or decide not to perfect, and release any such
security, with or without the substitution of new collateral;
(D) to release, substitute, agree not to sue, or deal with any
one or more of Borrower's sureties, endorsers, or other guarantors
on any terms or in any manner Lender may choose; (E) to determine
how, when and what application of payments and credits shall be
made on the Indebtedness (F) to apply such security and direct
the order or manner of sale thereof, including without limitation,
any nonjudicial sale permitted by the terms of the controlling
security agreement or deed of trust, as Lender in its discretion
may determine; (G) to sell, transfer, assign or grant participations
in all or any part of the Indebtedness; and (H) to assign or transfer
this Guaranty in whole or in part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and
warrants to Lender that (A) no representations or agreements of any
kind have been made to Guarantor which would limit or qualify in any
way the terms of this Guaranty; (B) this Guaranty is executed at
Borrower's request and not at the request of Lender; (C) Guarantor
has full power, right and authority to enter into this Guaranty;
(D) the provisions of this Guaranty do not conflict with or result
in a default under any agreement or other instrument binding upon
Guarantor and do not result in a violation of any law, regulation,
court decree or order applicable to Guarantor; (E) Guarantor has
not and will not, without the prior written consent of Lender,
sell, lease, assign, encumber, hypothecate, transfer, or otherwise
dispose of all or substantially all of Guarantor's assets, or any
interest therein; (F) upon Lender's request, Guarantor will provide
to Lender financial and credit information in form acceptable to
Lender, and all such financial information which currently has been,
and all future financial information which will be provided to
Lender is and will be true and correct in all material respects
and fairly present Guarantor's financial condition as of the
dates the financial information is provided; (G) no material
adverse change has occurred in Guarantor's financial condition
since the date of the most recent financial statements provided
to Lender and no event has occurred which may materially adversely
affect Guarantor's financial condition; (H) no litigation, claim,
investigation, administrative proceeding or similar action
(including those for unpaid taxes) against Guarantor is pending
or threatened; (1) Lender has made no representation to Guarantor
as to the creditworthiness of Borrower; and (J) financial
condition. Guarantor agrees to keep adequately informed from
such means of any facts, events, or circumstances which might
in any way affect Guarantor's risks under this Guaranty, and
Guarantor further agrees that, absent a request for information,
Xxxxxx shall have no obligation to disclose to Guarantor any
information or documents acquired by Lender in the course of
its relationship with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law,
Guarantor waives any right to require Lender (A) to continue
lending money or to extend other credit to Borrower;
(B) to make any presentment, protest, demand, or notice of
any kind, including notice of any nonpayment of the Indebtedness
or of any nonpayment related to any collateral, or notice of
any action or nonaction on the part of Borrower, Lender,
any surety, endorser, or other guarantor in connection with
the Indebtedness or in connection with the creation of new
or additional loans or obligations; (C) to resort for payment
or to proceed directly or at once against any person, including
Borrower or any other guarantor; (D) to proceed directly against
or exhaust any collateral held by Xxxxxx from Borrower, any other
guarantor, or any other person; (E) to give notice of the terms,
time, and place of any public or private sale of personal property
security held by Xxxxxx from Borrower or to comply with any other
applicable provisions of the Uniform Commercial Code; (F) to pursue
any other remedy within Lender's power; or (G) to commit any act or
omission of any kind, or at any time, with respect to any matter
whatsoever.
Guarantor also waives any and all rights or defenses arising by
reason of (A) any "one action" or "anti-deficiency" law or any
other law which may prevent Lender from bringing any action,
including a claim for deficiency, against Guarantor, before or
after Xxxxxx's commencement or completion of any foreclosure
action, either judicially or by exercise of a power of sale;
(B) any election of remedies by Lender which destroys or
otherwise adversely affects Guarantor's subrogation rights
or Guarantor's rights to proceed against Borrower for
reimbursement, including without limitation, any loss of
rights Guarantor may suffer by reason of any law limiting,
qualifying, or discharging the Indebtedness; (C) any
disability or other defense of Borrower, of any other
guarantor, or of any other person, or by reason of the
cessation of Borrower's liability from any cause whatsoever,
other than payment in full in legal tender, of the
Indebtedness; (D) any right to claim discharge of the
Indebtedness on the basis of unjustified impairment of
any collateral for the Indebtedness; (E) any statute of
limitations, if at any time any action or suit brought
by Lender against Guarantor is commenced, there is
outstanding Indebtedness of Borrower to Lender which
is not barred by any applicable statute of limitations;
or (F) any defenses given to guarantors at law or in
equity other than actual payment and performance of
the Indebtedness. If payment is made by Xxxxxxxx,
whether voluntarily or otherwise, or by any third party,
on the Indebtedness and thereafter Xxxxxx is forced to
remit the amount of that payment to Xxxxxxxx's trustee
in bankruptcy or to any similar person under any federal
or state bankruptcy law or law for the relief of debtors,
the Indebtedness shall be considered unpaid for the purpose
of the enforcement of this Guaranty.
Guarantor further waives and agrees not to assert or claim
at any time any deductions to the amount guaranteed under
this Guaranty for any claim of setoff, counterclaim, counter
demand, recoupment or similar right, whether such claim,
demand or right may be asserted by the Borrower, the
Guarantor, or both.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor
warrants and agrees that each of the waivers set forth above
is made with Guarantor's full knowledge of its significance
and consequences and that, under the circumstances, the
waivers are reasonable and not contrary to public policy
or law. If any such waiver is determined to be contrary
to any applicable law or public policy, such waiver shall
be effective only to the extent permitted by law or public
policy.
SUBORDINATION OF XXXXXXXX'S DEBTS TO GUARANTOR. Guarantor
agrees that the Indebtedness of Borrower to Lender,
whether now existing or hereafter created, shall be
superior to any claim that Guarantor may now have or
hereafter acquire against Borrower, whether or not
Borrower becomes insolvent. Guarantor hereby expressly
subordinates any claim Guarantor may have against Borrower,
upon any account whatsoever, to any claim that Lender may
now or hereafter have against Borrower. In the event of
insolvency and consequent liquidation of the assets of
Borrower, through bankruptcy, by an assignment for the
benefit of creditors, by voluntary liquidation, or
otherwise, the assets of Borrower applicable to the
payment of the claims of both Xxxxxx and Guarantor
shall be paid to Lender and shall be first applied by
Lender to the Indebtedness of Borrower to Lender.
Guarantor does hereby assign to Lender all claims
which it may have or acquire against Borrower or
against any assignee or trustee in bankruptcy of
Borrower; provided however, that such assignment
shall be effective only for the purpose of assuring
to Lender full payment in legal tender of the
Indebtedness. If Lender so requests, any notes or
credit agreements now or hereafter evidencing any
debts or obligations of Borrower to Guarantor shall
be marked with a legend that the same are subject
to this Guaranty and shall be delivered to Lender.
Xxxxxxxxx agrees, and Xxxxxx is hereby authorized,
in the name of Guarantor, from time to time to execute
and file financing statements and continuation statements
and to execute such other documents and to take such other
actions as Lender deems necessary or appropriate to perfect,
preserve and enforce its rights under this Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions
are a part of this Guaranty:
Amendments. This Guaranty, together with any Related Documents,
constitutes the entire understanding and agreement of the parties
as to the matters set forth in this Guaranty. No alteration of
or amendment to this Guaranty shall be effective unless given
in writing and signed by the party or parties sought to be
charged or bound by the alteration or amendment.
Attorneys' Fees; Expenses. Xxxxxxxxx agrees to pay upon demand
all of Xxxxxx's costs and expenses, including Xxxxxx's
attorneys' fees and Xxxxxx's legal expenses, incurred in
connection with the enforcement of this Guaranty.
Lender may hire or pay someone else to help enforce this
Guaranty, and Guarantor shall pay the costs and expenses
of such enforcement. Costs and expenses include Xxxxxx's
attorneys' fees and legal expenses whether or not there
is a lawsuit, including attorneys' fees and legal expenses
for bankruptcy proceedings (including efforts to modify
or vacate any automatic stay or injunction), appeals,
and any anticipated post-judgment collection services.
Guarantor also shall pay all court costs and such additional
fees as may be directed by the court.
Caption Headings. Caption headings in this Guaranty are
for convenience purposes only and are not to be used to
interpret or define the provisions of this Guaranty.
Governing Law. This Guaranty will be governed by,
construed and enforced in accordance with federal
law and the laws of the State of Iowa. This Guaranty
has been accepted by Xxxxxx in the State of Iowa.
Choice of Venue. If there is a lawsuit, Xxxxxxxxx
agrees upon Xxxxxx's request to submit to the
jurisdiction of the courts of POLK County, State of Iowa.
Integration. Xxxxxxxxx further agrees that Guarantor
has read and fully understands the terms of this
Guaranty; Guarantor has had the opportunity to be
advised by Guarantor's attorney with respect to
this Guaranty; the Guaranty fully reflects Guarantor's
intentions and parol evidence is not required to
interpret the terms of this Guaranty. Guarantor
hereby indemnities and holds Lender harmless from
all losses, claims, damages, and costs (including
Xxxxxx's attorneys' fees) suffered or incurred by
Xxxxxx as a result of any breach by Guarantor of
the warranties, representations and agreements of
this paragraph.
Interpretation. In all cases where there is more
than one Borrower or Guarantor, then all words
used in this Guaranty in the singular shall be
deemed to have been used in the plural where
the context and construction so require; and
where there is more than one Borrower named
in this Guaranty or when this Guaranty is
executed by more than one Guarantor, the words
"Borrower" and "Guarantor" respectively shall
mean all and any one or more of them. The words
"Guarantor," "Borrower," and "Lender" include
the heirs, successors, assigns, and transferees
of each of them. If a court finds that any
provision of this Guaranty is not valid or
should not be enforced, that fact by itself
will not mean that the rest of this Guaranty
will not be valid or enforced. Therefore,
a court will enforce the rest of the provisions
of this Guaranty even if a provision of this
Guaranty may be found to be invalid or unenforceable.
If any one or more of Borrower or Guarantor are
corporations, partnerships, limited liability
companies, or similar entities, it is not necessary
for Lender to inquire into the powers of Borrower
or Guarantor or of the officers, directors, partners,
managers, or other agents acting or purporting
to act on their behalf, and any Loan indebtedness
made or created in reliance upon the professed
exercise of such powers shall be guaranteed under
this Guaranty.
Notices. Any notice required to be given under
this Guaranty shall be given in writing, and
shall be effective when actually delivered,
when actually received by telefacsimile (unless
otherwise required by law), when deposited with
a nationally recognized overnight courier, or,
if mailed, when deposited in the United States mail,
as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the
beginning of this Guaranty. Any party may change
its address for notices under this Guaranty by
giving formal written notice to the other parties,
specifying that the purpose of the notice is to change
the party's address. For notice purposes, Xxxxxxxxx
agrees to keep Xxxxxx informed at all times of
Guarantor's current address. Unless otherwise provided
or required by law, if there is more than one Guarantor,
any notice given by Lender to any Guarantor is deemed
to be notice given to all Guarantors.
No Waiver by Xxxxxx. Lender shall not be deemed to
have waived any rights under this Guaranty unless
such waiver is given in writing and signed by Xxxxxx.
No delay or omission on the part of Lender in exercising
any right shall operate as a waiver of such right or any
other right. A waiver by Xxxxxx of a provision of this
Guaranty shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance
with that provision or any other provision of this Guaranty.
No prior waiver by Xxxxxx, nor any course of dealing
between Xxxxxx and Guarantor, shall constitute a waiver
of any of Lender's rights or of any of Guarantor's
obligations as to any future transactions. Whenever
the consent of Lender is required under this Guaranty,
the granting of such consent by Lender in any instance
shall not constitute continuing consent to subsequent
instances where such consent is required and in all
cases such consent may be granted or withheld in the
sole discretion of Lender.
Successors and Assigns. Subject to any limitations
stated in this Guaranty on transfer of Guarantor's
interest, this Guaranty shall be binding upon and
inure to the benefit of the parties, their
successors and assigns.
DEFINITIONS. The following capitalized words and
terms shall have the following meanings when used
in this Guaranty. Unless specifically stated to
the contrary, all references to dollar amounts
shall mean amounts in lawful money of the United
States of America. Words and terms used in the
singular shall include the plural, and the plural
shall include the singular, as the context may require.
Words and terms not otherwise defined in this Guaranty
shall have the meanings attributed to such terms in
the Uniform Commercial Code:
Borrower. The word "Borrower" means ART'S-WAY
MANUFACTURING CO., INC., and all other persons
and entities signing the Note in whatever capacity.
Guarantor. The word "Guarantor" means each and
every person or entity signing this Guaranty,
including without limitation X XXXX XXXXXXXXX XX.
Guaranty. The word "Guaranty" means the guaranty
from Guarantor to Lender, including without limitation
a guaranty of all or part of the Note. Indebtedness.
The word "Indebtedness" means Xxxxxxxx's indebtedness
to Lender as more particularly described in this Guaranty.
Lender. The word "Lender" means WEST DES MOINES STATE BANK,
its successors and assigns.
Note. The word "Note" means the promissory note dated
April 25, 2003, in the original principal amount of
$2,500,000.00 from Borrower to Lender, together with
all renewals of, extensions of, modifications of,
refinancings of, consolidations of, and substitutions
for the promissory note or agreement.
Related Documents. The words "Related Documents"
mean all promissory notes, credit agreements,
loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust,
security deeds, collateral mortgages, and all other
instruments, agreements and documents, whether now
or hereafter existing, executed in connection with
the Indebtedness.
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ
ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS.
IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY
IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF
THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE
UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION
TITLED "DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY
XXXXXX IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE.
THIS GUARANTY IS DATED APRIL 25, 2003.
GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF
THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS
RELATING TO THIS DEBT.
GUARANTOR:
COPY
X XXXX XXXXXXXXX XX, Individually
PROMISSORY NOTE
Borrower:ART'S-WAY MANUFACTURING CO., INC. Lender:WEST DES MOINES STATE BANK
(TIN: 00-0000000) MAIN BANK
XXX 0 XXXX, XX BOX 288 0000 00XX XXXXXX
XXXXXXXXX,XX 00000-0000 XXXX XXX XXXXXX, XX 00000
(000)000-0000
Principal Amount: $2,500,000.00 Initial Rate: 5.250%
Date of Note: April 25, 2003
PROMISE TO PAY. ART'S-WAY MANUFACTURING CO., INC. ("Borrower")
promises to pay to WEST DES MOINES STATE BANK ("Lender"),
or order, in lawful money of the United States of America,
the principal amount of Two Million Five Hundred Thousand
& 00/100 Dollars ($2,500,000.00) or so much as may be outstanding,
together with interest on the unpaid outstanding principal balance
of each advance. Interest shall be calculated from the date of each
advance until repayment of each advance.
PAYMENT. Borrower will pay this loan in one payment of all
outstanding principal plus all accrued unpaid interest
on February 28, 2004. In addition, Borrower will pay regular
monthly payments of all accrued unpaid interest due as of
each payment date, beginning May 28, 2003, with all subsequent
interest payments to be due on the same day of each month after
that. Unless otherwise agreed or required by applicable law,
payments will be applied first to accrued unpaid interest,
then to principal, and any remaining amount to any unpaid
collection costs and late charges. Interest on this Note
is computed on a 365/365 simple interest basis; that is,
by applying the ratio of the annual interest rate over
the number of days in a year, multiplied by the outstanding
principal balance, multiplied by the actual number of days
the principal balance is outstanding. Borrower will pay
Lender at Xxxxxx's address shown above or at such other
place as Lender may designate in writing.
VARIABLE INTEREST RATE. The interest rate on this Note
is subject to change from time to time based on changes
in an index which is Xxxxxx's Prime Rate (the "Index").
This is the rate Lender charges, or would charge, on 90-day
unsecured loans to the most creditworthy corporate customers.
This rate may or may not be the lowest rate available from
Lender at any given time. Lender will tell Borrower the
current Index rate upon Xxxxxxxx's request. The interest
rate change will not occur more often than each DAY.
Borrower understands that Lender may make loans based
on other rates as well. The Index currently is 4.250% per
annum. The interest rate to be applied to the unpaid
principal balance of this Note will be at a rate of
1.000 percentage point over the Index, resulting in
an initial rate of 5.250% per annum. NOTICE: Under
no circumstances will the interest rate on this
Note be more than the maximum rate allowed by applicable
law.
PREPAYMENT; MINIMUM INTEREST CHARGE. Xxxxxxxx agrees
that all loan fees and other prepaid finance charges are
earned fully as of the date of the loan and will not be
subject to refund upon early payment (whether voluntary
or as a result of default), except as otherwise required by
law. In any event, even upon full prepayment of this Note,
Borrower understands that Lender is entitled to a minimum
interest charge of $7.50. Other than Xxxxxxxx's obligation
to pay any minimum interest charge, Borrower may pay without
penalty all or a portion of the amount owed earlier than it
is due. Early payments will not, unless agreed to by Xxxxxx
in writing, relieve Xxxxxxxx of Xxxxxxxx's obligation to
continue to make payments of accrued unpaid interest.
Rather, early payments will reduce the principal balance due.
Xxxxxxxx agrees not to send Lender payments marked "paid in full",
"without recourse", or similar language. If Borrower sends
such a payment, Xxxxxx may accept it without losing any of
Xxxxxx's rights under this Note, and Borrower will remain
obligated to pay any further amount owed to Lender.
All written communications concerning disputed amounts,
including any check or other payment instrument that
indicates that the payment constitutes "payment in full"
of the amount owed or that is tendered with other conditions
or limitations or as full satisfaction of a disputed amount
must be mailed or delivered to: WEST DES MOINES STATE BANK,
MAIN BANK, 0000 00XX XXXXXX, XXXX XXX XXXXXX, XX 00000.
LATE CHARGE. If a payment is 11 days or more late,
Borrower will be charged $15.00.
INTEREST AFTER DEFAULT. Upon default, including failure to pay
upon final maturity, Lender, at its option, may, if permitted
under applicable law, increase the variable interest rate on
this Note to 3.000 percentage points over the Index. The
interest rate will not exceed the maximum rate permitted
by applicable law.
DEFAULT. Each of the following shall constitute an event
of default ("Event of Default") under this Note:
Payment Default. Borrower fails to make any payment
when due under this Note.
Other Defaults. Borrower fails to comply with or to
perform any other term, obligation, covenant or
condition contained in this Note or in any of the
related documents or to comply with or to perform
any term, obligation, covenant or condition contained
in any other agreement between Lender and Borrower.
Default in Favor of Third Parties. Borrower or any
Grantor defaults under any loan, extension of credit,
security agreement, purchase or sales agreement, or
any other agreement, in favor of any other creditor
or person that may materially affect any of Borrower's
property or Borrower's ability to repay this Note or
perform Borrower's obligations under this Note or any
of the related documents.
False Statements. Any warranty, representation or
statement made or furnished to Lender by Borrower
or on Borrower's behalf under this Note or the
related documents is false or misleading in any
material respect, either now or at the time made
or furnished or becomes false or misleading at
any time thereafter.
Insolvency. The dissolution or termination of
Xxxxxxxx's existence as a going business, the insolvency
of Xxxxxxxx, the appointment of a receiver for any part of
Xxxxxxxx's property, any assignment for the benefit of creditors,
any type of creditor workout, or the commencement of any proceeding
under any bankruptcy or insolvency laws by or against Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure
or forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by
any governmental agency against any collateral securing the loan.
This includes a garnishment of any of Xxxxxxxx's accounts, including
deposit accounts, with Lender. However, this Event of Default shall
not apply if there is a good faith dispute by Xxxxxxxx as to the validity
or reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Borrower gives Xxxxxx written notice of
the creditor or forfeiture proceeding and deposits with Lender monies
or a surety bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an adequate reserve
or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with
respect to any Guarantor of any of the indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of,
or liability under, any guaranty of the indebtedness evidenced by
this Note. In the event of a death, Lender, at its option, may, but
shall not be required to, permit the Guarantor's estate to assume
unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure any Event of Default.
Change In Ownership. Any change in ownership of twenty-five percent
(25%) or more of the common stock of Borrower.
Adverse Change. A material adverse change occurs in Borrower's
financial condition, or Xxxxxx believes the prospect of payment
or performance of this Note is impaired.
Insecurity. Lender in good faith believes itself insecure.
Cure Provisions. If any default, other than a default in payment is
curable and if Borrower has not been given a notice of a breach of
the same provision of this Note within the preceding twelve (12) months,
it may be cured (and no event of default will have occurred) if Borrower,
after receiving written notice from Lender demanding cure of such default:
(1) cures the default within twenty (20) days; or (2) if the cure requires
more than twenty (20) days, immediately initiates steps which Lender deems
in Xxxxxx's sole discretion to be sufficient to cure the default and
thereafter continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Xxxxxx may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest immediately
due, and then Borrower will pay that amount.
ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower will pay Lender
that amount. This includes, subject to any limits under applicable law,
Xxxxxx's attorneys' fees and Xxxxxx's legal expenses, whether or not
there is a lawsuit, including without limitation all attorneys' fees
and legal expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals.
If not prohibited by applicable law, Xxxxxxxx also will pay any court
costs, in addition to all other sums provided by law.
GOVERNING LAW. This Note will be governed by, construed and enforced
in accordance with federal law and the laws of the State of Iowa.
This Note has been accepted by Xxxxxx in the State of Iowa.
CHOICE OF VENUE. If there is a lawsuit, Xxxxxxxx agrees upon Xxxxxx's
request to submit to the jurisdiction of the courts of POLK County,
State of Iowa.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender
reserves a right of setoff in all Borrower's accounts with Lender (whether
checking, savings, or some other account). This includes all accounts
Borrower holds jointly with someone else and all accounts Borrower
may open in the future. However, this does not include any IRA or
Xxxxx accounts, or any trust accounts for which setoff would be
prohibited by law. Borrower authorizes Xxxxxx, to the extent
permitted by applicable law, to charge or setoff all sums owing
on the indebtedness against any and all such accounts, and, at
Xxxxxx's option, to administratively freeze all such accounts
to allow Lender to protect Xxxxxx's charge and setoff rights
provided in this paragraph.
COLLATERAL. Borrower acknowledges this Note is secured by REAL
ESTATE MORTGAGE DATED 4/25/03, SECURITY AGREEMENT DATED 4/25/03,
UNLIMITED GUARANTY OF X. XXXX XXXXXXXXX XX., AND REFERENCE TERMS
OF COMMITMENT LETTER DATED 4/7/03.
LINE OF CREDIT. This Note evidences a revolving line of credit.
Advances under this Note, as well as directions for payment from
Xxxxxxxx's accounts, may be requested orally or in writing by Borrower
or by an authorized person. Lender may, but need not, require that
all oral requests be confirmed in writing. Xxxxxxxx agrees to be
liable for all sums either: (A) advanced in accordance with the
instructions of an authorized person or (B) credited to any of
Xxxxxxxx's accounts with Xxxxxx. The unpaid principal balance
owing on this Note at any time may be evidenced by endorsements
on this Note or by Xxxxxx's internal records, including daily
computer print-outs. Lender will have no obligation to advance
funds under this Note if: (A) Borrower or any guarantor is in
default under the terms of this Note or any agreement that Borrower
or any guarantor has with Lender, including any agreement made in
connection with the signing of this Note; (B) Borrower or any
guarantor ceases doing business or is insolvent; (C) any
guarantor seeks, claims or otherwise attempts to limit, modify
or revoke such guarantor's guarantee of this Note or any other
loan with Lender; (D) Borrower has applied funds provided pursuant
to this Note for purposes other than those authorized by Lender;
or (E) Lender in good faith believes itself insecure.
PURPOSE OF LOAN. The specific purpose of this loan is:
WORKING CAPITAL.
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon
Xxxxxxxx, and upon Xxxxxxxx's heirs, personal representatives,
successors and assigns, and shall inure to the benefit of Lender
and its successors and assigns.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of
its rights or remedies under this Note without losing them.
Borrower and any other person who signs, guarantees or endorses
this Note, to the extent allowed by law, waive presentment,
demand for payment, and notice of dishonor. Upon any change
in the terms of this Note, and unless otherwise expressly stated
in writing, no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released
from liability. All such parties agree that Lender may renew or
extend (repeatedly and for any length of time) this loan or release
any party or guarantor or collateral; or impair, fail to realize
upon or perfect Xxxxxx's security interest in the collateral;
and take any other action deemed necessary by Xxxxxx without the
consent of or notice to anyone. All such parties also agree that
Xxxxxx may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made.
The obligations under this Note are joint and several.
PRIOR TO SIGNING THIS NOTE, XXXXXXXX READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE
PROVISIONS. XXXXXXXX AGREES TO THE TERMS OF THE NOTE.
XXXXXXXX ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS
PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT.
BORROWER:
ART'S-WAY MANUFACTURING CO., INC.
By: COPY
Xxxx X. Xxxxxxxx, President of Art's-Way
Manufacturing Co., Inc.
